Should the tipped employee exemption to minimum wage be repealed?

[noonereal]

Tipping has its roots in racism.

How so?

 

[PirateMk1]

It's very relevant.

Wait staffs makes some serious bucks. Enough is enough. They don't need your pennies.
Oh yeah, your idea of wait staff is the Denny's waitress, my idea of wait staff is the maitre d' at The Polo Bar.

Wait staff is wait staff they all need to be paid minimum wage if one exists. There should be no exceptions.

 

[noonereal]

Wait staff is wait staff they all need to be paid minimum wage if one exists. There should be no exceptions.

They all are required by law to earn minimum wage or above.

The OP thread cap is very misleading.

 

[PirateMk1]

They all are required by law to earn minimum wage or above.

The OP thread cap is very misleading.

Depends on the state. Some states allow employers to pay tipped employees less than minimum wage.

 

[noonereal]

Depends on the state. Some states allow employers to pay tipped employees less than minimum wage.

Pay attention.

The Federal Government guarantees all waiters in the country earn, at least, the federal minimum wage.
A state may not have a lower requirement, they may have a higher requirement.

 

[bluesmoke]

Good grief. And I thought the OP misguided.

This thread just gets better and better.

God Bless.

Do you have anything substantive to say, pertinent to my post? Specifically, what in my post is "misguided" and why?

 

[GummyVitamins]

The problem I have with this is that it seems to be on the honor system. How is the employer to know someone didn't make enough in tips to make minimum wage? Do they have to trust the employee? And if an employee didn't make minimum wage is it because there wasn't enough business or because they are bad at their job? The whole process is odd. I've seen restaurants overstaff early shifts to get the restaurant open knowing they won't make much or possibly not make minimum wage and they're expected to eat the loss for a period of time until they can get better/more profitable shift.

 

[Bodi]

This was back in the '90s when I was in restaurants for 15 years or so and I know that I worked in some like California Pizza Kitchen and the Chart House (both as lead server) and then in much nicer ones (5 Star and Michelin Starred ones) up in wine country, California... so I might be in a different situation... but pretty much nobody cared about their hourly paycheck. What was a $150 dollar paycheck (if it was even that) after two weeks when each night I was walking out with $200 - $300 dollars in cash, and occasionally as high as $600, 5 days a week?

 

[Bodi]

The problem I have with this is that it seems to be on the honor system. How is the employer to know someone didn't make enough in tips to make minimum wage? Do they have to trust the employee? And if an employee didn't make minimum wage is it because there wasn't enough business or because they are bad at their job? The whole process is odd. I've seen restaurants overstaff early shifts to get the restaurant open knowing they won't make much or possibly not make minimum wage and they're expected to eat the loss for a period of time until they can get better/more profitable shift.

Because you have to declare your tips each night for tax reasons... You have to declare ALL credit card/debit card tips because they are automatically logged into the POS system when you close the check/table. Your check out total for credit/debit cards can be easily discovered as inaccurate if audited by the IRS not to mention that if a person pays for a $50 dollar meal and tips $10 and then they check their credit card statement and only see $55 (or whatever) charged to them they can call the restaurant and with the manager quickly find that the server cheated the other $5 bucks. Also, when the server check out at the end of each service you are supposed to declare your cash tips as well but most generally do not because the vast majority are credit/debit tips and the customer nor the IRS have any record of what the cash tip might be or any ability to prove it if they had some strange interest to do so.

 

[Bodi]

I don't know if New York does allow this or not. I am just saying how my buddy did it. Not necessarily the same thing, I don't know.
Plus, my knowledge of how it handled tips was from the early 90's.

No one ever quite, I know he was very generous. My guess is that the tips were spilt in addition to a wage far above minimum.

He had zero employee turnover.

Depends on the type of restaurant for that to work. Places I worked I (and most I talked about it with) would never agree to tip sharing. I was always one of the best servers and made great tips 20-25%. I would not want to share what I made with somebody making lesser. One great place had about 20 servers or so and I would say that less than half were really good. At places like the Chart House and CPK it was even less.

 

[noonereal]

Places I worked I (and most I talked about it with) would never agree to tip sharing.

I would think sharing tips would be management (owner) decision.
If you want the job, that is how it's done. Period.
I am not disagreeing with you but I do know in most restaurants the wait staff does not have a union nor that kind of power.

 

[Bodi]

I would think sharing tips would be management (owner) decision.
If you want the job, that is how it's done. Period.
I am not disagreeing with you but I do know in most restaurants the wait staff does not have a union nor that kind of power.

It is an owners decision... I just meant that if they switched to that it would not have flown with me. Sorry if I worded it poorly...

 

[GummyVitamins]

Because you have to declare your tips each night for tax reasons... You have to declare ALL credit card/debit card tips because they are automatically logged into the POS system when you close the check/table. Your check out total for credit/debit cards can be easily discovered as inaccurate if audited by the IRS not to mention that if a person pays for a $50 dollar meal and tips $10 and then they check their credit card statement and only see $55 (or whatever) charged to them they can call the restaurant and with the manager quickly find that the server cheated the other $5 bucks. Also, when the server check out at the end of each service you are supposed to declare your cash tips as well but most generally do not because the vast majority are credit/debit tips and the customer nor the IRS have any record of what the cash tip might be or any ability to prove it if they had some strange interest to do so.

I know a lot of people who work in the service industry and I don't know a single one who declares of all of their cash tips. They declare something for fear of being audited, but the number they declare is very abysmal compared to the actual cash tips earned... which is another problem I have with the tipping culture in the US. It's basically known tax evasion that we are just used to.

 

[Bodi]

I know a lot of people who work in the service industry and I don't know a single one who declares of all of their cash tips. They declare something for fear of being audited, but the number they declare is very abysmal compared to the actual cash tips earned... which is another problem I have with the tipping culture in the US. It's basically known tax evasion that we are just used to.

It is not tax evasion... it is customers paying for what they get one way instead of another.

People either pay the server a tip or they pay more for their meal.

Everything will cost more as a result of having to pay the server more. Not just that, at fine dining restaurants they will have to pay tons more for the expertise that their waiters have. They also pay for the bartender, host/hostess, sommelier, food expo/pass, bus boy, etc.

I had many parties like this but one of the last was a party of 22 doctors... I was the captain of the team and got a tip of $2,300 dollars. I obviously had to tip out my team. Bus Boy got $300. Bartender $100. Sommelier (a level three) $200. The Hostess $200. The Expo $200. A couple of servers that only helped deliver food during 4 course meal deliveries $50. The valet $100. A couple of others $50 here or there... I walked with $1,000.

Imagine having to pay all of those employees more per hour. Instead of a $40 filet Mignon it would be $50. Extrapolate the rest. WE made a lot because we know a lot... what is in every dish, what sauces are... what is a roux, bordelaise, where the meats come from and what grade... the difference between a Gewurztraminer and a Riesling.. we met with the vintners and wine owners to know about vintages, years, wine pairings...

When I hear people complain about tipping it just pisses me off...

People need to go to a restaurant, eat their food, tip their waiter and piss off because most people, and I mean 95% of the people have no idea what waiting tables, bartending entails.

 

[GummyVitamins]

It is not tax evasion... it is customers paying for what they get one way instead of another.

It's tax evasion for the employees who do not claim all of their cash tips as well as the employer who then gets out of payroll taxes. It runs rampant in the services industry.

When I hear people complain about tipping it just pisses me off...

I don't mind tipping. I just think there needs to be better controls over the reporting.

 

[bluesmoke]

The problem I have with this is that it seems to be on the honor system. How is the employer to know someone didn't make enough in tips to make minimum wage? Do they have to trust the employee? And if an employee didn't make minimum wage is it because there wasn't enough business or because they are bad at their job? The whole process is odd. I've seen restaurants overstaff early shifts to get the restaurant open knowing they won't make much or possibly not make minimum wage and they're expected to eat the loss for a period of time until they can get better/more profitable shift.

Servers earned a median wage of $11 per hour, according to the BLS, with half earning above that figure and half earning below it. On an annual basis, this puts a U.S. waiter salary or waitress salary at $22,890 per year. The lowest 10 percent earned less than $8.37 per hour, while the top 10 percent of earners made more than $20.65 per hour.

How Much Do Waiters Get Paid an Hour? (chron.com)

Overall across all industries, waiters report an average salary range of $8.37 to $20.65/hr on tips. Average hourly wage for waiters at $12.88.

How Much Do Waiters and Bartenders Make? (investopedia.com)

I’m saying tips would not be reported. They are a gratuity, a social custom and etiquette, and should not be taxed, IMO. Workers in these salary ranges are most likely among the 47% that pay no FIT, anyway.

All workers should get a living wage, which, depending on region/locale of the country would be about the same as the avg hrly wage for waiters given above, or not much more.

 

[Bodi]

It's tax evasion for the employees who do not claim all of their cash tips as well as the employer who then gets out of payroll taxes. It runs rampant in the services industry.


I don't mind tipping. I just think there needs to be better controls over the reporting.

It is not tax evasion... it is a gratuity or gift. That should not be taxed... if anything, servers are paying more than they need to by declaring any tips.

 

[GummyVitamins]

It is not tax evasion... it is a gratuity or gift. That should not be taxed... if anything, servers are paying more than they need to by declaring any tips.

Tips are compensation for services.

 

[Bodi]

Tips are compensation for services.

No, it is an gift given once service is complete.

 

[Lethargic Aptitude]

The way everyone is depending on tips, it almost makes a menu with prices pointless.

 

[Amyishere]

The restaurant industry has lobbied for thirty years to keep wait staff paid so outrageously little that it's damn near obscene. It's time to end that shit and make it a flat salary, the minimum wage everyone else gets. period.

that's basically how I feel about it. And I cannot say much more because I am just that passionate about it. It's the most unfair wages next to agricultural workers in this country today.

 

[Wayne Jr]

.

Do what you want with tipping but we need a Universal Basic Income.

 

[EMNofSeattle]

Do what you want with tipping but we need a Universal Basic Income.

No, we don’t. That is a stupid idea. Paying people not to work is a recipe to destroy society.

 

[Wayne Jr]

No, we don’t. That is a stupid idea. Paying people not to work is a recipe to destroy society.

Wait...so if you got a check for $1,000 every month, you would quit your job and sit at home? Because UBC is paid to everyone, employed or not. Why would you want to subsist on $12,000pr/yr instead of just adding that onto your existing income? You make zero sense.

 

[Excon]

To the thread. Yes.

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No, it is an gift given once service is complete.

Not in the US.

From the IRS.

Tips are discretionary (optional or extra) payments determined by a customer that employees receive from customers.

Tips include:

• Cash tips received directly from customers.
• Tips from customers who leave a tip through electronic settlement or payment. This includes a credit card, debit card, gift card, or any other electronic payment method.
• The value of any noncash tips, such as tickets, or other items of value.
• Tip amounts received from other employees paid out through tip pools or tip splitting, or other formal or informal tip sharing arrangement.

All cash and non-cash tips an employee receives are income and are subject to Federal income taxes. All cash tips received by an employee in any calendar month are subject to social security and Medicare taxes and must be reported to the employer, unless the tips received by the employee during a single calendar month while working for the employer total less than $20. Cash tips include tips received from customers, charged tips (e.g., credit and debit card charges) distributed to the employee by his or her employer, and tips received from other employees under any tip-sharing arrangement.